No, robots aren't coming for your job. But technology can free up time to do more of what your clients really value.
Have you heard of the BBC widget that says accounting is going the way of lamp lighters, switchboard operators, and VCR repair technicians? According to the tool, there’s a 95% chance that accounting jobs will be automated within the next two decades.
Scary stuff—if you don’t know the whole story.
Gartner also predicts that artificial intelligence (AI) will eliminate 1.8 million jobs, but the good news is it will create 2.3 million jobs. So while the term “robo-accountant” makes for a clickable headline, automation won’t replace accountants.
In fact, knowing how to make accounting automation work for you will make your job easier and allow you to focus on the best parts of being an accountant: building client relationships, offering advice, and providing services that clients really value.
Sound appealing? Then keep reading to find out how to make accounting automation work for you.
Table of Contents
Benefits of Accounting Automation
Automation is changing the way accountants work—and for the better. Consider these examples of how robotic process automation (RPA) can benefit your firm.
Transactional Accounting Tasks Will Take Less Time
Automating transactional accounting tasks like posting transactions, making journal entries, and reconciling bank accounts and credit card statements can save a lot of time and effort.
Manually handling these tasks is time-consuming and prone to human error. If you’re relying on manual processes, you’re spending a good chunk of each day on data entry and other tasks that your accounting software can handle faster and more accurately.
You and Your Clients Benefit From Real-Time Information
In business, effective decision-making depends on facts and data. If your clients’ books are only updated once a week, once a month, or once a quarter, they’re basing decisions on yesterday’s news.
Accounting automation software can pull information from multiple sources—bank and credit card fees, their payroll tool, customer relationship management software, etc. This provides easy access to up-to-date financial data on which to base future projections and essential decisions.
Chances are, you didn’t get into accounting because you love preparing T-accounts, tracking down that one missing penny in a 5,000-column spreadsheet, or painstakingly entering every number from your client’s trial balance into your tax software. So why spend hours on these repetitive tasks?
Machines can handle the repetitive, manual work, but they can’t do everything on their own. Your clients still need your expertise and judgment. Who wouldn’t want to leave behind the tedious and frustrating aspects of their job and make more room for building relationships and coming up with revenue-generating or cost-saving strategies?
3 Steps to Accounting Automation Success
If you’re new to automated accounting and machine learning, it can be hard to see the vision. Before you start digging into the technical aspects, it’s crucial to get into the right mindset.
1. Learn About the Possibilities
You don’t have to become an expert in AI, RPA, or other technologies to benefit from accounting automation. Instead, seek information from sources you trust.
Leverage their expertise to help you stay on top of what’s possible.
2. Build the Right Foundation
Automation is challenging—if not impossible—if you’re not using cloud accounting software. So transition your firm and clients off any legacy on-premises accounting systems.
You’ll improve collaboration with your team and clients and benefit from any time, anywhere access and improved security.
3. Embrace Your New Role
Computers can process information lightning fast and error-free, but they can’t build relationships, think strategically, or use professional judgment.
If you feel like your soft skills could use a little polishing, focus on improving your confidence levels in communication, problem-solving, collaboration, empathetic listening, and having consultative conversations. These are the skills that will differentiate you from a number-crunching machine.
8 Key Accounting Processes You Can Start Automating Today
To help you get started, we’ve identified the following accounting tasks that can easily be automated.
1. Accounts Payable
Accounts payable can involve a lot of repetitive validations and data-gathering, so automating one or more of the steps involved allows you to minimize errors and save time.
Accounts payable automation can help you or your clients automate approvals, capture data from bills, and take advantage of early payment discounts.
2. Tax and Audit Documentation
Documenting income and expenses for tax and audit purposes is key to claiming valuable tax deductions, filing a complete and accurate tax return, and helping audits run smoothly. Accounting automation can help you maintain the tax documents you need and save time by ensuring all the data you need is in the client’s accounting system.
For example, FreshBooks automatically captures the merchant name, totals, and taxes from bills and receipts when clients upload a photo or take a picture of a receipt in the FreshBooks mobile app. This creates expenses and bills in seconds without having to manually enter all of the information and ensures all the necessary records are there at tax time.
3. Accounts Receivable
Properly tracking accounts receivable is crucial for a small business’s cash flow, but clients rarely give it the time and attention it deserves. Automating A/R tasks can help clients generate accurate invoices and get quick approvals.
In FreshBooks, clients can set up recurring invoices for their customers that regularly pay a set amount and automate payment reminders to customers to ensure invoices get paid on time. Your clients’ customers can also safely set up their credit cards for auto payments.
Many accounting professionals believe reconciliations are a task that requires human judgment. But the right accounting software can automate a big chunk of the bank account and credit card reconciliations.
To help you and your clients get through reconciliations faster, FreshBooks suggests possible matches based on past information from bank transactions and entries. You simply need to either approve the match if the entry is correct or easily fix the entry.
5. Preparing Reports and Analyzing Data
Business owners and their advisors use reports to understand financial data and communicate results. Today, you don’t need to spend hours inputting data into a spreadsheet to generate those reports. Instead, you can automate reporting, pulling data from the client’s accounting software.
In FreshBooks, you can access important reports, including a Profit & Loss Statement, Balance Sheet, Expense Reports, Sales Tax Summaries, and more. And if you need more help crunching the numbers, FreshBooks integrates with dozens of data analytics tools.
6. Posting Journal Entries
Many businesses have transactions that occur every month and monthly or annual journal entries that need to be posted on a regular basis. Automating these recurring journal entries can save a ton of time.
In FreshBooks, all activities, including sending invoices, accepting payments, and creating credits and expenses, are compiled into journal entries. You can also create Recurring Expenses that will generate automatically on a set cadence—perfect for handling those subscription-related costs.
Without the right automated system, running payroll can be tedious. You have to account for every hour, ensure you’re using the proper tax rates, and record every payroll run in the accounting software.
Fortunately, payroll can be fully automated in many small businesses. Gusto is an easy-to-use payroll solution designed for small businesses that seamlessly integrates with FreshBooks. It even automatically pulls every payroll transaction into your client’s accounting software as an expense.
8. Tax Filing
If you prepare and file tax returns for your clients, automated tools can save time and ensure your accounting records are always tax-ready.
FreshBooks partners with Tallyfor to simplify the process by preparing book-to-tax reconciliations and flowing data straight from the trial balance to tax forms. This can save you hours on each return and allow you to increase your client base without hiring additional staff.
Which Accounting Tasks Will You Automate First?
If you’re still hesitant to dive head-first into automating accounting processes, remember it’s not an all-or-nothing proposition. Start small with some specific accounting tasks you dread doing. Once you see how much time and energy you can save with financial automation, you’ll gain the confidence to keep going!